Household Growth Reversal

The reign of rentership in America may be winding down. While new renter households grew steadily from 2006 to 2016, these households are now in decline as new owner households increase.

From the second quarter of 2016 to the second quarter of 2018, renter households decreased by 754,000 while 3.13 million owner households were added, according to Zillow senior economist Aaron Terrazas. By contrast, renter households grew by 9.72 million in the decade ending in 2016, and owner households dropped by 1.76 million. Additionally, home value appreciation is growing sharply while rent appreciation is slowing down.

A decade-long surge in rentership spanning the later years of the housing boom, the entirety of the housing bust and the early years of the subsequent recovery came to an abrupt end in 2016, according to an analysis of data from the U.S. Census Bureau’s Homeownership and Housing Vacancy Survey ... Most research points to supply trends as the primary explanation for this divergence between value appreciation in homes versus rents, but these data suggest that demand is also at play.

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